Anthropic takes $5B from Amazon and pledges $100B in cloud spending in return

Does anyone feel that the jig is almost up? Surely the returns aren’t anywhere close to what investors expect with the sheer amount of cash at this point in time.

Are Anthropic and OpenAI rushing to IPO for immediate cash so they can delay the inevitable? Surely this cycle of robbing Peter to pay Paul to pay John to pay Tim must end.

We are only just now getting a taste of the “true cost” of these tokens. Then there is a lack of compute bottlenecking everything. Even now I’m looking at the 7.5x rate of tokens for Opus 4.7

Open models are promising and cost a fraction of what they proprietary models cost which the big two are vulnerable to when companies start to feel the cost of tokens.

Will data centres be built fast enough and powered sufficiently to lower the cost of compute thus tokens?

Is it just a giant Hail Mary to get to AGI ASAP before the economy collapses?

Above all else, I simply feel the models have plateaued. I am noticing productivity loss for tasks I deem as “complex”

With chip development you need scale in order to get to the edge. It makes sense to finance demand so you can get to scale it's not like it's a ponzi scheme.

Anthropic gets access to limited compute resources and Amazon gets demand to justify increased R&D and capex + feedback from the best users in the field.

Translation: Antropic never intends to spend $100 billion on AWS.

Every single argument you've brought up is irrelevant in the face of billions of dollars. If you intend to consume $100 billion dollars in data center infrastructure, you're going to find a way to accomplish it while cutting out the middlemen.

Meanwhile if you're flaky and never intend to spend that money, you're going to come up with a way to pay someone else to deal with those problems and quit paying the moment they don't.

You'd never do both at the same time. You'd never commit your money and give them control over your business critical infrastructure.

Hence the deal is a sham. The $100 billion are a lie. Thank you for telling us.

The $5B isn't a gift. Amazon is buying shares for $5B, and they're getting a spending commitment. I don't have any insight into the agreement, but on a ten year $100B spending commitment, I would expect $5B to be spent in no more than 3 years, and likely sooner.

In my reading, Amazon is giving $5B of usage credits in exchange for shares. If Anthropic works out, it's a good deal for Amazon. If it doesn't, they lose on their invesment sheet, but they got ~ $5B in revenue, so it looks good on their operating sheet. And it helped justify a build out that they can sell to others.

For Anthropic, this lets them operate for more time without having to make numbers work. If Anthropic works out, they'll figure out the $100B commitment later. If it doesn't work out, it's not their problem.

It's probably faster to build up amazon's capacity with amazon's money than to build owned capacity with someone else's money at the scale they're looking to build out.

> Jevons does not save you either,

There's also a very strong Trurl and Klapaucius [1] component to this AI craziness, as in I remember a passage in Lem's The Cyberiad where either Trurl or Klapaucius were "discussing" with an intelligent/AGI robot and asking it for stuff-to-know/information, at which point said AGI robot started literally inundating them with information, paper on top of paper on top of paper of information. At that point it doesn't even matter if that information is correct or smart or whatever, because by that point the very amount of said information has changed everything into a futile endeavour.

[1] https://en.wikipedia.org/wiki/The_Cyberiad